In 2015, the Hermes Corporation Failed to Record $8,000 in Depreciation

question 60

Essay

In 2015, the Hermes Corporation failed to record $8,000 in depreciation expense. The error was discovered in May of 2016.
Required:
Make the appropriate journal entry in the books of Hermes Corporation in the year 2016. Explain the impact of the error correction on the Hermes' 2016 net income.

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Definitions:

Security Interest

A legal claim or lien on collateral, giving a lender the right to take property to satisfy a debt if the debtor defaults.

Default

The failure to meet the legal obligations of a loan, typically by not making the required payments.

Re-Perfect

The act of renewing or restoring a security interest or claim in property to its original status or priority, generally after it has been lapsed or compromised.

Security Interest

A legal claim or lien on collateral that has been pledged, usually to secure a loan or obligation.